California real estate speculation decreasing
By Ari Barak, Bay City News Service
January 17, 2007
Speculation in California's real estate market decreased in
2006, according to an indicator of the quick resale of homes,
a consumer real estate information Web site reported this week.
Only 3.2 percent of all homes resold in the state last year were
owned for six months or less, the lowest amount since 2.4 percent
in 2003, according to the Web site www.HomeSmartReports.com.
The decline in speculative buying and reselling, or "flipping,''
of homes comes as home values have leveled off, reducing the opportunities
for profit, HomeSmartReports president Mike Ela said.
"Speculative buying and selling of homes contributes to
market volatility and risk, all part of that 'bubble' theory people
were talking about,'' Ela said.
In the Bay Area, the percentage of "flip'' sales in 2006
was even lower, at 2.7 percent over all nine counties. Napa County
represented the lowest rate of quick resales in the state at 1.9
According to the Web site, 24.9 percent of "flip'' sales
statewide in 2006 resulted in a loss for the seller, after factoring
in commissions and costs.
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